What Level of Public Debt Could India Target?
AbstractThis paper discusses possible medium-term public debt targets for India, based on evidence from the economic literature on prudent levels of public debt and the feasibility for the country to meet a particular target over the next 5-6 years. While recognizing the challenges in determining an appropriate debt target, cross-country analysis and simulations suggest that a debt ratio in the range of 60-65 percent of GDP by 2015/16 might be suitable for India. Such a debt ceiling, while still above the average debt level for emerging markets, is within the range of debt ratios that would provide room for countercyclical fiscal policy and contingent liabilities. It would also send a strong signal of the government''s commitment to fiscal consolidation by making a clear break with the past.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 10/7.
Date of creation: 01 Jan 2010
Date of revision:
Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonathan David Ostry & Abdul Abiad, 2005. "Primary Surpluses and sustainable Debt Levels in Emerging Market Countries," IMF Policy Discussion Papers 05/6, International Monetary Fund.
- Aiyagari, S. Rao & McGrattan, Ellen R., 1998.
"The optimum quantity of debt,"
Journal of Monetary Economics,
Elsevier, vol. 42(3), pages 447-469, October.
- Gabriel Di Bella, 2008. "A Stochastic Framework for Public Debt Sustainability Analysis," IMF Working Papers 08/58, International Monetary Fund.
- Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2003.
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 34(1), pages 1-74.
- Audrey Desbonnet & Sumudu Kankanamge, 2007. "Public debt and aggregate risk," Documents de travail du Centre d'Economie de la Sorbonne v07042, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Fabian Valencia & Luc Laeven, 2008. "Systemic Banking Crises," IMF Working Papers 08/224, International Monetary Fund.
- Roberto Perotti, 1999. "Fiscal Policy In Good Times And Bad," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1399-1436, November.
- repec:hal:cesptp:halshs-00175877 is not listed on IDEAS
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- Stephan Danninger, 2002. "A New Rule," IMF Working Papers 02/18, International Monetary Fund.
- Krugman, Paul, 1988.
"Financing vs. forgiving a debt overhang,"
Journal of Development Economics,
Elsevier, vol. 29(3), pages 253-268, November.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2008.
"The Forgotten History of Domestic Debt,"
NBER Working Papers
13946, National Bureau of Economic Research, Inc.
- Cohen, Daniel, 1997.
"Growth and external debt: a new perspective on the african and latin american tragedies,"
CEPREMAP Working Papers (Couverture Orange)
- Cohen, Daniel, 1997. "Growth and External Debt: A New Perspective on the African and Latin American Tragedies," CEPR Discussion Papers 1753, C.E.P.R. Discussion Papers.
- David J. Smyth & Yu Hsing, 1995. "In Search Of An Optimal Debt Ratio For Economic Growth," Contemporary Economic Policy, Western Economic Association International, vol. 13(4), pages 51-59, October.
- HÃ©lÃ¨ne Poirson & Luca Antonio Ricci & Catherine A. Pattillo, 2002.
"External Debt and Growth,"
IMF Working Papers
02/69, International Monetary Fund.
- Bernheim, B Douglas, 1989. "A Neoclassical Perspective on Budget Deficits," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 55-72, Spring.
- Axel Schimmelpfennig & Nouriel Roubini & Paolo Manasse, 2003. "Predicting Sovereign Debt Crises," IMF Working Papers 03/221, International Monetary Fund.
- van Doorn, Ralph & Suri, Vivek & Gooptu, Sudarshan, 2010. "Do middle-income countries continue to have the ability to deal with the global financial crisis ?," Policy Research Working Paper Series 5381, The World Bank.
- Sergey Vlasov, 2011. "Russian Fiscal Framework Past, Present and Future.Do we Need a Change?," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(64), pages 35-81, October -.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).
If references are entirely missing, you can add them using this form.